MINIMUM 4% INTEREST RATE FOR SPECIAL, MEDISAVE AND RETIREMENT ACCOUNT MONIES TO EXTEND UNTIL 31 DECEMBER 2011
	News Release by: Central Provident Fund Board 20 September 2010 --
	One–Year Extension of 4% Floor Rate for all SMRA Monies Since 1 January 2008, savings in the Special, Medisave and Retirement Account (SMRA) have been invested in Special Government Securities (SSGS) which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%.  This is a market-based rate for instruments of comparable risk and duration, and will ensure that members receive fair and reasonable interest rates.
	However, to help members cope with the transition, the Government had committed to providing a 4% floor rate for SMRA interest for two years up to December 2009.  This was extended to December 2010, in light of the global economic conditions and exceptionally low interest rate environment a year ago.
	The Government has decided to further extend the 4% floor rate for interest earned on all SMRA monies for another year until 31 December 2011.  Thereafter, interest rates on all CPF account monies will be subject to a minimum rate of 2.5% per annum.
	Minister for Manpower Mr Gan Kim Yong said, “Despite our strong economic recovery, interest rates have remained low this year.  The sharp drop in interest rates at the expiry of the 4% floor rate may impact CPF members who may not have benefited fully from the economic recovery yet.  Therefore, the Government has decided to extend the 4% floor rate on SMRA monies for another year.” CPF Interest Rate for Special and Medisave Accounts from 1 October 2010 to 31 December 2010 CPF members will continue to receive interest of 4% a year on their SMA savings from 1 October 2010 to 31 December 2010. For the period 1 September 2009 to 31 August 2010, the 12-month average yield of the 10YSGS plus 1% worked out to be 3.52%. Please refer to Annex A for the 10-year SGS yield. Since this rate is below the current floor rate of 4%, the SMA interest rate from 1 October 2010 to 31 December 2010 will remain at 4% p.a.
	Background information on other announcements related to CPF Interest Rate for SMA and RA:
	Interest Rate for Retirement Account Monies
	From 1 January 2010, RA savings are invested in SSGS which earn a fixed coupon equal to the 12-month average yield of the 10YSGS plus 1% at the point of issuance.  The interest rate to be credited to the RA will be the weighted average interest of the entire portfolio of these SSGS, and adjusted yearly in January.  As announced in December 2009, the RA interest rate from 1 January 2010 to 31 December 2010 will be maintained at 4% p.a.
	Additional Interest of 1%
	An additional 1% interest will continue to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account (OA).  The additional interest received on the OA will go into the member’s SA or RA to enhance his retirement savings.  If the member is above 55 years old and participates in the LIFE scheme, the additional 1% interest will also apply to his annuity premium, less annuity payouts already made.  The additional interest earned on the member’s LIFE annuity monies will be paid into his RA.
	Public Enquiries For more information, please visit www.cpf.gov.sg or call the CPF Call Centre at 1800-227-1188.
	Annex A
	Computation of Interest Rate Peg Average yield of 10-Year SGS from September 2009 to August 2010 2.52% (Note 1) Plus 1% 1.00% Computed Interest Rate Peg (yield of 10-Year SGS + 1%) 3.52%
	Note:
	1. Source: Yields of 10-Year Singapore Government Securities are obtained from www.sgs.gov.sg
	10-Year SGS Yield from September 2009 to August 2010